New Year doldrums
for Chinese food offerings
Businesses that normally look forward to Chinese New Year
as members of Thailand’s Chinese community flock to purchase items for use
in religious offerings faced the doldrums this year due to soaring prices of
eggs, chickens and pork.
A report published recently by the KASIKORN Research
Center, formerly the Thai Farmers Research Center, had anticipated more
money would be spent this year, with half of the money going towards
religious offerings. However, the rising prices of eggs, chickens and pork,
which together form an important component of the offerings, saw producers
of these goods miss out on a golden opportunity.
However, there was better news for fruit sellers, thanks
to the free trade deal on fruits and vegetables signed with China last year,
which forced down prices of fruits by as much as 20 percent. (TNA)
Tax measures to boost use of alternative energy
The Ministry of Energy is preparing a raft of tax
measures designed to encourage the use of alternative energy, including
wind, water, biomass and solar power, from the current 0.5 percent to 7.5
percent by the year 2011.
Siriporn Sailasuta, Director-general of the Department of
Alternative Energy Development and Efficiency, said that her department has
been asked by the ministry to study measures to promote the use of
alternative energy in order to reduce the country’s fuel imports. Tax
measures are likely to include the carrot of tax concessions for users of
alternative energy sources, in particular industries which consumed large
quantities of energy.
“In addition, the Ministry of Energy will focus on the
promotion of research and studies on the use of alternative energy in
Thailand, with the government providing partial financial assistance,”
Siriporn said, adding that more companies investing in Thailand will be
using alternative energy sources which is now required by current
ASEAN ministers push
for economic community
The Association of Southeast Asian Nation’s (ASEAN)
dream of creating a region-wide economic community edged closer to becoming
realized on January 21 when ASEAN economic ministers met in the Indonesian
city of Yogyakarta for an unofficial meeting and agreed on a plan to see the
birth of the AEC by 2020.
According to the plan, agreed by Thailand’s Commerce
Minister Watana Muangsook and his counterparts from the nine other ASEAN
member states, the region will work on the coordination of operations in 11
types of goods and services with the eventual aim of creating the ASEAN
Economic Community (AEC).
The 11 branches in question include agriculture, rubber,
timber products, fabrics, electronic goods, automobiles, information
technology (IT), health products, tourism and aviation. Thailand has been
made responsible for the tourism and aviation sector, and has already joined
with Singapore to announce an open sky- policy on commercial flights,
starting in February of this year.
The ASEAN ministers also met with European Union trade
officials, agreeing to expand cooperation in terms of trade and investment.
The EU will negotiate with representatives of ASEAN’s private sector at a
workshop to be held in Bangkok in March, while in May the EU will help
organize a seminar on EU food safety regulations during the THAIFEX trade
Vietnam and Laos, meanwhile, were given assurances by the
other ASEAN members that they would receive full ASEAN backing in their bids
for WTO membership. (TNA)
Oil Fund may be used to halt price fluctuations
The Energy Policy and Planning Office (EPPO) is studying
the possibility of using money from the Oil Fund in order to accumulate oil
reserves, and to prevent future price fluctuations.
EPPO Director-General Metta Bangturngsuk revealed that
despite the fact that the government was set to float the price of cooking
gas in April, it would continue to collect money from oil users to go into
the Oil Fund in order to pay off old debts incurred by government efforts to
cap cooking gas prices.
Currently the government has to pay around 5 billion
baht, or 400 baht per month, to gas and oil refineries as part of the debt
The government is also likely to invest in energy
stability measures by creating strategic oil reserves when oil prices are
cheap in order to keep prices down when global prices rise.
“Approaches to oil reserves must be studied
hand-in-hand with the land bridge project in the south, as the two projects
are related. We need to see who will benefit from the oil storage facilities
that will be constructed. It is possible that we will negotiate the
borrowing of oil from traders for storage in the land bridge’s storage
facilities, which can be used when oil prices are high. This could be in
exchange for greater state facilitation for oil traders,” Metta said.
Jewelry exports likely to grow 15% this year
The country’s jewelry exports are likely to grow 15%
this year, with total value of US$2.5 billion, as a result of tax incentives
and efforts to seek new markets, according to an industry executive. Preeda
Tiewsuwan, Chairman of Pranda Jewelry Plc. projected that the jewelry
business would grow on par with the government’s intention to promote
Bangkok as a fashion hub.
Jewelry exports totaled $2.31 billion in the first 11
months of last year, and were expected to reach $2.5 billion next year.
Biggest gains are predicted in the major destinations of the US, Germany and
United Kingdom. (TNA)
BOT to scrutinize credit card consumerism
The Bank of Thailand (BOT) has stated it will closely
monitor the credit card market and may also review the current requirement
regarding the minimum monthly salary of card holders in response to worries
over Thais’ spending habits.
BOT Governor Pridiyathorn Devakula said, “The BOT needs
to evaluate whether the minimum monthly salary of 15,000 baht set for card
applicants is appropriate for current economic conditions. There is concern
over the social issue of encouraging the public to spend too much through
credit and becoming burdened by debt.”
Pridiyathorn conceded credit cards have become an
important tool in modern economic systems. However, the central bank will
seek precautionary measures to avoid social problems that may arise from the
credit card business. He stressed that too much spending could eventually
destroy what has traditionally been a culture of saving, especially among
low income earners.
The central bank currently requires card issuers to
charge clients a combined interest rate and service fee of not more than 18
percent a year, which enables banks to gain a 10 percent spread - the
difference between the interest rate and the cost of card issuance.
Pridiyathorn said, “This rule has encouraged credit
card issuers to exercise more caution when it comes to expanding the card
According to BOT figures, as of end-September, 2003,
domestic commercial banks issued a total of 2.86 million credit cards, while
non-bank firms issued a total of 3.57 million credit cards. (TNA)
Use of gasohol on the rise
The government, through the Ministry of Energy, is
launching a campaign, encouraging motorists to turn to use ‘gasohol’,
which is the mixture of gasoline and alcohol in the 9:1 proportion on the
average, following a recent oil price hike in the domestic market, caused by
rising oil prices in the world market.
An initial survey found that sales of ‘gasohol’ at
petrol stations have been increasing, reflecting that more motorists were
turning to use the alternative fuel, which is about 0.50 baht cheaper than
Energy Minister Prommin Lertsuridej said earlier this
week that he had turned to use ‘gasohol’, and had faced no problems.
Repurchase rate to remain unchanged
The Bank of Thailand (BOT)’s Monetary Policy Committee
has decided to keep the repurchase (RP) rate unchanged, as internal and
external economic environments still remain sound, according to BOT
Assistant Governor Bandid Nijathaworn.
After a meeting of the central bank’s Monetary Policy
Committee, Bandid said, “The committee considered the current monetary
policy and interest rates to be appropriate and in accordance with the
country’s economic conditions, and resolved that the RP rate be maintained
at 1.25% annually.”
Bandid explained, “A thorough review of the country’s
latest economic data and indicators showed that expanding consumption,
investment and exports, as well as a surplus current account, high-level
foreign reserves, and lower foreign debts confirm Thailand’s economic
stability. The inflation rate is also being maintained at around 0.2
percent. These factors make the current interest rate suitable.” (TNA)
Leslie Wright battling the Crab
Long time Chiangmai Mail contributor Leslie Wright,
Managing Director of Westminster Portfolio Services, author of the weekly
Family Money column that usually appears on this page, and author of the
inspiring series, “Battling the Crab”, is currently in critical
condition, battling cancer, in ICU room 301 at Bamrungrad Hospital, Bangkok.
Chiangmai Mail, as well as all his friends and associates, wish him all the
best. We pray for a speedy recovery.